New BIS document: Consumer credit and personal insolvency review: summary of responses on consumer credit and formal response on personal insolvency
BIS have published the Consumer credit and personal insolvency review: summary of responses on consumer credit and formal response on personal insolvency. The document summarises responses to the call for evidence on consumer credit (URN 10/1185) and includes the Government response to the personal insolvency part of the review. I found paragraph 5.4 particularly interesting. It relates to responses on debtor education. The paragraph notes:
"Some responses also referred to the need for financial education to ensure that consumers were better placed to apply only for credit that they could afford to repay. The importance and value of free face-to-face debt advice was highlighted, as were concerns that any reduction in funding for debt advice would affect the most vulnerable debtors."
I first piloted some debtor education workshops at Kingston University back in 2006/2007 with some seed corn money from KPMG and as part of a project for the Insolvency Service (See the report here: Part One & Part Two). Unfortunately take up was very low with debtors. We advertised in all London CABs, ORs and online. It was a great shame as we constructed an excellent handbook (if I do say so myself!). I co-delivered the workshops with Susan Morgan (KPMG) and Leyanda Cocks (now at BPP at QM). These lasted for three hours (with a break!) and ranged across lots of financial issues.
As readers may know the American and Canadians are very much engaged with these workshops. Professor Karen Gross gave a paper a year or so ago in which she argued that the debtor education workshop sector in the US had just created another profiteering arena, a bit like 'IVA factories'. I suppose that could be a good thing for potential providers. However, there will always be a problem attracting debtors to these workshops unless it is mandatory.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...